YOUNG cattle prices continue to drop with supply up somewhat up compared to recent times and restockers becoming more choosy as their paddocks start to fill up.
The Eastern Young Cattle Indicator is today sitting on 1008 cents a kilogram carcase weight, having dropped 41c in the past week and a massive 118c in the past four weeks.
NSW Farmers Association president James Jackson the declining market had not elicited concern among producers, who were typically making business and production decisions as per longer-term plans.
Prices remained historically high and the easing had been anticipated, he said.
"A large part of the record prices we've experienced has been driven by restockers rebuilding post drought. That has created serious demand which has competed with feedlots and the meat market to push prices up and up," he said.
"Everyone was aware that when that grass market started to ease, there would be a correction.
"The fundamentals are still very good."
Meat & Livestock Australia market information analyst Jenny Lim said mixed quality and variation in the drafts being presented at the saleyards was now creating a two-tier pricing structure.
Good quality cattle were fetching a strong price whereas some of the plainer types were going for a heavy discount, she said.
"The wet and wintery conditions from the last few months have not been aiding the quality and finish on the cattle passing through the saleyards," she said.
"Restockers and processors can be pickier around quality and what cattle they bid for as supply increases, putting downward pressure on prices, with processors bringing their grids back."
Thomas Elders Markets reported the Western Young Cattle Indicator came under heavier pressure than east coast markets, dropping 9.3 per cent in the last half of June, compared to the EYCI's 5.4pc drop.
Most analysts have the EYCI continuing to decline at a marginal rate, with the general outlook for beef production still solid.
There are, however, headwinds being flagged.
The latest rural commodities wrap from the National Australia Bank said rising interest rates would likely make consumers cut back on luxury goods.
Whether that would extend to beef remained to be seen.
NAB senior agribusiness economist Phin Ziebell said while weather conditions were generally good to excellent, rising feed costs would present a challenge to feedlots.
The feed grain price index has now surpassed the previous peak of October 2018, he said.
Mr Jackson said there were still supply chain issues with getting meat around the globe and the Australian beef industry continued to deal with the hangover from Chinese trade tensions.
"On the other hand, demand is growing in many markets and a lot of new markets are opening up for beef around the planet," he said.
Meanwhile, MLA market information manager Steve Bignell has provided a summary of the cattle price price heights reached in the past financial year.
The EYCI peaked at 1191.52c, the WYCI at 1222.66c, heavy steers at 501.43c/kg live weight, feeder steers 575.98c and medium cows 387.91c.
The number of cattle on feed reached a new high during the past financial year too.
In the March 2022 quarter, there were 1.3m head of cattle in feedlots, surpassing the previous record set in winter 2019 in the midst of a drought.
"The feedlot sector has provided continuity of supply throughout 2021-22 and this has been reflected in grain-fed slaughter accounting for 55pc of all cattle processed. This flowed through to record grain-fed production and domestic consumption, hitting 60pc for both metrics," Mr Bignell said.
The female slaughter rate also hit 40.9pc in the past financial year. There hasn't been an FSR that low since 2011.
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